Posted by:  CCP Zipporah Gikonyo   On   July 13, 2021

Saving is a form of discipline that requires training and commitment. Through saving we become generous to ourselves and to others, saving give us an insight into the future and enable us to achieve our life goals. Saving wealth involves conservation of resources that we generously waste without a care.

Saving enables one to achieve financial independency by helping us create multiple streams of income that can be obtained through investment.  Investment funded from saving has a greater opportunity to grow unlike when one borrows to make an investment.

Developing a saving culture one requires to make it a habit, discipline, commitment and denying immediate gratification to self in anticipation of future gratification.  To become a smart saver, one requires to become a smart shopper by looking for deals, having a budget, putting extra earnings into saving and increasing saving amount from time to time.

Wealth management starts with a budgeting and tracking income and expenses. One must be aware of how much they earn and how much they spend. Budgeting creates a balance between cash coming in and cash going out. Incoming funds must exceed or equal outgoing funds, incoming are salaries, interest on savings, rent income etc. outgoing funds include rent, food, fuel, telephone, utilities, wants, charity, investment etc.

To gain understanding on saving it is important to understand different types of income which include;

  1. Active Income- It is the income earned when one is actively engaged and requires time investment in order to earn the income it includes salary, commission income from employment and businesses

  2. Passive Income- It is the income that is generated from avenues that you have little or no involvement  and you receive benefit on regular basis or annually. It includes rental income, partnership income, dividends, interest, royalties and capital gains.

  3. Generosity – giving to others leads to an increase into your wealth. Those who share receive back in different ways that may not be visible. This includes donations, philanthropy, social entrepreneurship, government taxes.

When should I start saving? Start today and start small and you will have started a journey to true wealth.

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